Tech Giants Bypass Merger Law Through Frontier AI Deal Structures

Frontier AI labs are increasingly reliant on a handful of large technology companies for capital, chips, and cloud infrastructure.

Since late 2023, competition authorities in four jurisdictions have reviewed eight transactions tying these labs to major tech firms, but nearly all were found to fall outside of merger law.

The UK's Competition and Markets Authority (CMA) repeatedly concluded that no relevant merger situation had arisen, clearing Microsoft's deals with OpenAI and Mistral and Amazon's partnership with Anthropic.

However, in one exception, Brazil separately ordered a merger review of the Microsoft-Inflection deal under Article 88(7) of the Competition Law.

The CMA found that Microsoft held a high degree of material influence over OpenAI's commercial policy due to its multibillion-dollar investment and informal governance access, but concluded this fell short of de facto control.